This week, between October 26th and 29th, the Chinese Communist Party is meeting in Beijing for their fifth plenum during which time they will draft the country’s 13th Five Year Plan (第十三个五年规划). This is a time when the political elite of the world’s most populous country will lay the blueprints for the near future of the People’s Republic, proposing policies ranging from economic growth to environmental protection.
Beijing has already laid out several of the goals of the next five year plan, although many of the details will be determined during this week’s plenum. In regards to economy, China’s leadership aims to double the size of its real economy by 2020, requiring a yearly minimum growth of 6.5%. While this pales in comparison to the double digit annual growth percentages that China has exhibited in the past, it still is questionable whether China will be able to maintain this growth model in light of its recent economic woes. Its current estimated growth percentage, 6.9%, is the slowest growth rate that the country has experienced since the financial crisis of 2009. This number can be expected to continue dropping as Beijing attempts steering the country towards a more sustainable, consumer-driven economic model.
In addition to potentially revamping its economic goals, China’s new Five Year plan can be expected to continue increasing stimulus programs to help ease the pain of slower economic growth. Its fiscal spending has increased 26% since August of last year, benefiting sectors such as healthcare, education, and environmental protection. These factors that encompass the overall category of public welfare in China can expect to remain favored by the 13th Five Year Plan as the country strives to improve the overall quality of life for its citizens. Additionally, more comprehensive transportation and infrastructure development within and between cities will also be highlighted in the new plan, so as to continue relieving stress from China’s road systems and environment.
This plan is also expected to favor three main sectors: internet-plus, the services sector, and other industries that will aid the country’s technological development capacity. This, combined with the potential liberalization of China’s currency, could spark a revolution in the quality of China’s production (i.e. from common place household items to biomedical technology and internet tech). While this will be a boon to China’s emerging technological and energy-based companies, its traditional industries of steel, cement, and paper can expect to suffer from loss of favor and stricter environmental regulations.
While ambitious in its goals, it now remains to be determined whether China’s newest Five Year Plan will be effectively executed or whether its traditional problems with corruption, poverty, and political repression will stunt the continued growth of the country.